City floats takeover of Lakeshore Lions Arena
The city should assume millions in debt and take over operations of the Lakeshore Lions Arena, the four-pad rink in Etobicoke where the Toronto Maple Leafs and Marlies practice, a staff report says.
The arena, which opened its doors in September 2009, is $43.5 million in debt.
The Lakeshore Lions Arena Inc. (LLAI) runs the arena. It runs the risk of sliding into bankruptcy due to rising interest rates, loans that are coming due and "delays in maximizing commercial opportunities," the report released Monday said. The city has already guaranteed $35.5 million of that amount.
"If they default, the city would be on the hook for paying those amounts of money," said Brenda Patterson, the city's general manager of parks and recreation.
"But more importantly what would happen is the whole facility would shut down. People, in September, would lose the opportunity to have their ice time there, people would start to be fearful that they were going to lose access to the ice, and we'd be starting the whole thing up again from scratch."
In order to avoid that scenario, staff recommend the city create its own corporation, Lakeshore Arena Corporation, to run the arena. In order for the corporation to function, it will require $200,000 in start-up costs, and an $800,000 line of credit.
The city should only control the arena for two to three years, after which time it would find another operator to take control "with minimal to no loss to the city," the report said.
The recommendation will be debated at council's executive committee on June 20.
The rink at 400 Kipling Avenue was built after the LLAI was able to secure a 50-year lease from the Toronto District School Board for the land. It has three NHL-sized rinks and one Olympic-sized rink.
The Leafs and Marlies are tenants of the arena.
The operators of the arena are providing 800 hours annually of prime ice time to the city. The Toronto District School Board, meanwhile, has access to 500 hours of non-prime time ice.